May 29, 2013

New law allows foreigners to own 60% of rural banks

President Aquino has signed a law allowing foreigners to own up to 60 percent of voting stocks in rural banks. Under the law, foreigners can now be elected members of the board of directors of rural banks in the countryside. Previously, rural banks should be “100 percent Filipino-owned.”

The new law likewise allows rural banks to foreclose the mortgage of properties or lands even if these are covered by the Comprehensive Agrarian Reform Program, although the threshold should not be “more than five hectares,” as provided for in the statute. Rural Bankers Association of the Philippines (RBAP) president Leandro Z. Garcia Jr. said this law would help create an environment conducive to economic growth in the countryside. - WealthSec